Why is the ‘Completion Rule’ of the Quantity Contract Related SAP Item Category set to ‘C’ ?

What is the Transaction code to create Contracts in SAP ?

Create a Quantity Contract in SAP for Customer 1400 and for material M-01 with quantity 100. Specify the Contract #

Create a Release Order for a quantity of 50 , with reference to the SAP Contract created in Q.4 and specify the Release Order #

Create another Release Order with reference to the SAP Contract created in Q.4 and this time, fully reference the quantity and specify the Release Order #

Describe in your own words, why businesses use quantity contracts ?

A _____________ order is created to release quantity from a quantity contract or value contract

Scenario 1 : Samsung has 1,000 computers in their New Jersey office and are constantly facing issues related to software and aging hardware. ABC Computers Inc., suggests that they enter into a contract whereby they will take care of the computers/software for a fixed yearly fee.

Question 9. What kind of contracts would they enter into ?

Scenario 2 :Samsung likes ABC Computer’s performance and after 1 year wishes to buy 300 more computers from them. However, since the company wishes to purchase so many computers, they wish to get a discount.

Question 10. What kind of contract would they enter into ?

Scenario 3 : Release Orders for Contracts created ( For Q.9 and Q.10 above ) will have to be created with reference to the contracts. However, the sales personnel entering the contracts might not be aware of the contracts that were created. ABC Computers want to put a system in place so that anytime orders are created for Samsung, they should be reminded that open contracts exist ( if any )

Question 11. What kind of configuration would have to be done to achieve the same in SAP ?

28 thoughts on “Contracts in SAP – SAP SD Training – Jan 2011 Batch”

1) A) True for quantity contract, value contract, assortment module
B) False for service and maintenance contract
2) Item quantity is completed after the target quantity is fully referred, the contract is for certain amount of items to be delivered so it can’t be complete without fully referring to the contracted items
3) Va41
4) Quantity contract : 40000221
5) 14019 release order
6) 14020 release order
7) Business use quantity contract to deliver certain amount of goods according to the requirement of the customer and at a price fixed at the time of price.
8) Sales order OR (standard order)
9) Value contract
10) Quantity contract
11) Completion rule should be used to refer

2.Why is the ‘Completion Rule’ of the Quantity Contract Related SAP Item Category set to ‘C’ ?
Ans. Just to check if there is any open order of a particular Item for the same customer.

3.What is the Transaction code to create Contracts in SAP ?
Ans.VA41

4.Create a Quantity Contract in SAP for Customer 1400 and for material M-01 with quantity 100. Specify the Contract #
Ans.QC created :40000234

5.Create a Release Order for a quantity of 50 , with reference to the SAP Contract created in Q.4 and specify the Release Order #
Ans.Release Order: 16125

6.Create another Release Order with reference to the SAP Contract created in Q.4 and this time, fully reference the quantity and specify the Release Order #
Ans.Release Order: 16126

7.Describe in your own words, why businesses use quantity contracts ?
Ans.Because, its like an agreement that, a customer will order a specific quantity of product in a time period.

8.A _____________ order is created to release quantity from a quantity contract or value contract
Ans. Standard Order

Scenario 1 : Samsung has 1,000 computers in their New Jersey office and are constantly facing issues related to software and aging hardware. ABC Computers Inc.,suggests that they enter into a contract whereby they will take care of the computers/software for a fixed yearly fee.
Question 9. What kind of contracts would they enter into ?
Ans. Service Contract

Scenario 2 :Samsung likes ABC Computer’s performance and after 1 year wishes to buy 300 more computers from them. However, since the company wishes to purchase so many computers, they wish to get a discount.
Question 10. What kind of contract would they enter into ?
Ans. Quantity Contract

Scenario 3 : Release Orders for Contracts created ( For Q.9 and Q.10 above ) will have to be created with reference to the contracts. However, the sales personnel entering the contracts might not be aware of the contracts that were created. ABC Computers want to put a system in place so that anytime orders are created for
Samsung, they should be reminded that open contracts exist ( if any )
Question 11. What kind of configuration would have to be done to achieve the same in SAP ?
Ans. Completion rule has to be configured, to check if there is any open order for the same customer or some quantity is left to refer.

Answers :
1. Quantity Contracts, Value Contracts – true, Service & Maintenance Contracts – false.
2.
3. The tcode is VA41
4. Contract # 40000214 created.
5. Order # 13515 created.
6. Order # 13516 created
7. The selling company can accurately determine how many products can be sold and need to be delivered to a specific customer. Customers can lock in a specific quantity of a product they need at a predetermined price and have them shipped as they need them.
8. Sales or standard order.
9. Service Contract
10. Quantity Contract
11. A completion rule would need to be setup.

2. Why is the ‘Completion Rule’ of the Quantity Contract Related SAP Item Category set to ‘C’ ?
Answer: Quantity Contract: 40000251
Item Category: KMN – completion rule is set to ‘C’ – as the item is only considered to be complete once the contracted quantity is ordered/ released.

3. What is the Transaction code to create Contracts in SAP ?
Answer: VA41

5. Create a Release Order for a quantity of 50 , with reference to the SAP Contract created in Q.4 and specify the Release Order #
Answer: SIVA – when creating a release order get the following error message:
Pricing error: Mandatory condition VA00 is missing
6. Create another Release Order with reference to the SAP Contract created in Q.4 and this time, fully reference the quantity and specify the Release Order #

7. Describe in your own words, why businesses use quantity contracts?
Answer: From a company perspective: they would like to have visibility and confirmed orders to help them with production planning. Also, to sell more quantity to the same customer.
From a Customer’s perspective: They would like to get discounted rates and have confirmed shipment of products within the contract period (this really helps with items that are in short supply)
8. A release order is created to release quantity from a quantity contract or value contract

Scenario 1 : Samsung has 1,000 computers in their New Jersey office and are constantly facing issues related to software and aging hardware. ABC Computers Inc., suggests that they enter into a contract whereby they will take care of the computers/software for a fixed yearly fee.
Question 9. What kind of contracts would they enter into? Service contract

Scenario 2 :Samsung likes ABC Computer’s performance and after 1 year wishes to buy 300 more computers from them. However, since the company wishes to purchase so many computers, they wish to get a discount.
Question 10. What kind of contract would they enter into? Quantity Contract

Scenario 3 : Release Orders for Contracts created ( For Q.9 and Q.10 above ) will have to be created with reference to the contracts. However, the sales personnel entering the contracts might not be aware of the contracts that were created. ABC Computers want to put a system in place so that anytime orders are created for Samsung, they should be reminded that open contracts exist (if any)
Question 11. What kind of configuration would have to be done to achieve the same in SAP?
Answer: When creating an order for Samsung, Required the Contract reference to be provided.
SIVA: should we update the Customer Master data to reflect this rule somewhere there?

Item quantity is completed after the target quantity is fully referred, the contract is for certain amount of items to be delivered so it can’t be complete without fully referring to the contracted items

Ans- C

T-code for creation of contract is-VA41

Ans- D

Quantity Contract 40000232/QC created.

Ans-e

Release order 14158/OR created. it gave me a message but allowed me to create an order.(dynamic credit check exceeded)

Ans-f

14159/OR .same message as above but allowed me the creation of the order.

Ans-g

in quantity contracts customer promise to buy certain quantity during the specific period of time from the vendor. By this way seller will also be assured of order as well.

a. Not all documents require release order QC, Value contracts need release orders, Service contracts do not need release order
b. It is set to “C” because it makes sure that targeted quantity must be fully referenced or not over referenced
c. Va41
d. 40000250
e. 14276
f. 14277
g. Release order
h. There could be number of reasons like limited production capacity, company wants to restrict quantity for customer, product have high demand than supply
i. They will enter in service contract
j. Wk2
k. We will set message master contr =”check”

B.Why is the ‘Completion Rule’ of the Quantity Contract Related SAP Item Category set to ‘C’ ?

C.What is the Transaction code to create Contracts in SAP ?

ANS: T-Code VA41

D. Create a Quantity Contract in SAP for Customer 1400 and for material M-01 with quantity 100. Specify the Contract #

ANS: Quantity Contract # 40000256

E.Create a Release Order for a quantity of 50 , with reference to the SAP Contract created in Q.4 and specify the Release Order #

ANS: Order # 14710

F.Create another Release Order with reference to the SAP Contract created in Q.4 and this time, fully reference the quantity and specify the Release Order #

G.Describe in your own words, why businesses use quantity contracts ?

ANS: There could be multiple reasons both on the customer or the vendor part.

On the customer part he might get a discount if he buys a certain quantity. A product is really hot and may not be available in the market after some time so the customer wants to make sure that he has a certain quantity available for him.

On the vendor part he may want to restrict a customer to a certain quantity because of a number of reasons. There is a supply and demand problem…..etc etc.

H. A “REALEAS” order is created to release quantity from a quantity contract or value contract

Scenario 1 : Samsung has 1,000 computers in their New Jersey office and are constantly facing issues related to software and aging hardware. ABC Computers Inc., suggests that they enter into a contract whereby they will take care of the computers/software for a fixed yearly fee.

Question 9. What kind of contracts would they enter into ?

ANS: SERVICE CONTRACTS

Scenario 2 :Samsung likes ABC Computer’s performance and after 1 year wishes to buy 300 more computers from them. However, since the company wishes to purchase so many computers, they wish to get a discount.

Question 10. What kind of contract would they enter into ?

ANS: QUANTITY CONTRACT

Scenario 3 : Release Orders for Contracts created ( For Q.9 and Q.10 above ) will have to be created with reference to the contracts. However, the sales personnel entering the contracts might not be aware of the contracts that were created. ABC Computers want to put a system in place so that anytime orders are created for Samsung, they should be reminded that open contracts exist ( if any )

Question 11. What kind of configuration would have to be done to achieve the same in SAP ?

ANS: In the document type under the “Transaction Flow Tab” in the Outline

B.Why is the ‘Completion Rule’ of the Quantity Contract Related SAP Item Category set to ‘C’ ?

Ans: For a contract release orders can be created untill the material is available in the contract and the completion rule-C in the Item category shows the status of the item whether the item is completed or not.

C.What is the Transaction code to create Contracts in SAP ?

Ans. T.Code:VA41

D.Create a Quantity Contract in SAP for Customer 1400 and for material M-01 with quantity 100. Specify the Contract #

Ans: Created a qty contract # 40000264

E.Create a Release Order for a quantity of 50 , with reference to the SAP Contract created in Q.4 and specify the Release Order #

Ans: Realese order # 14868 (for qty 50)

F.Create another Release Order with reference to the SAP Contract created in Q.4 and this time, fully reference the quantity and specify the Release Order #

Ans: Release order # 14869 for the remaining 50.

G.Describe in your own words, why businesses use quantity contracts ?

Ans: From the customers perspective he might get into a qty contract becasu he might get a discount if he buys large volumes but from the Companys perspective there may be a Demand – Supply problem becasu of which they would wish to supply only certain qty of goods to each customer.

H.A _____________ order is created to release quantity from a quantity contract or value contract

Ans: Release Order

Question 9. What kind of contracts would they enter into ?

Ans: Service Contract

Question 10. What kind of contract would they enter into ?

Ans: Quantity Contract

Question 11. What kind of configuration would have to be done to achieve the same in SAP ?

Ans: In the Document type under the “Trasaction Flow” tab for the field ” Outline Agreement” set “B(Check at item level)”.

Ans1: False. Only Contract document types which have physical deliverables require release orders. For e.g. Service contracts and master contract will not require release orders
Ans2: Quantity contract is an agreement to supply fixed qty over a period of time. Since it is a qty contract the contract is followed only if the qty in the contract is fully referenced. The ‘Completion Rule is set to ‘C’ as it configures the document type to be considered complete when qty is fully referenced.
Ans3: VA41
Ans4: 40000268 QC created.
Ans5: Release order 14968 created from Qty Contract.
Ans6: : Release order 14969 created from Qty Contract
And7: Qty contracts are used in two scenarios. One when quantities are limited then customers are allocated quantities by time and they can place orders via release orders only. Secondly when customers want deep discounts the sales people want customers to lock in quantities over a time period. Tis allows the sales people to meet their sales figures.
Ans8: Release order.
Ans9: Service contract
Ans 10: Quantity contract
Ans11: Not sure??

As discussed in the slideshow, create an order for S.org 1000/14/00 . The materials and customers also need to be different. However, please remember that you can create the same effect using the following combination in any sales area you like

1. Material Type should be Service ( DIEN )
2. Item Category should be relevant for Billing Plan
3. Pricing procedure should contain pricing condition types similar to PPSV

While creating the above release order, the price for material S-02 comes to 99,990 for 1 pc whereas in Condition record I have specified a price of $230.00 for Condition type ZU00…Plz help…Thx and regards…Shah

Questions :
1. All Contracts document types require release orders. ( Give examples of document types in either case )
1. TRUE
2. FALSE
“FALSE”…Service, Maintenance.
2. Why is the ‘Completion Rule’ of the Quantity Contract Related SAP Item Category set to ‘C’ ?
The contact is not complete unless the specified quantity is fully referenced.
3. What is the Transaction code to create Contracts in SAP ?
VA41
4. Create a Quantity Contract in SAP for Customer 1400 and for material M-01 with quantity 100. Specify the Contract #
40000215
5. Create a Release Order for a quantity of 50 , with reference to the SAP Contract created in Q.4 and specify the Release Order #
13409
6. Create another Release Order with reference to the SAP Contract created in Q.4 and this time, fully reference the quantity and specify the Release Order #
13419
7. Describe in your own words, why businesses use quantity contracts ?
Two Cases…Case # 1: When quantities are limited, the company enters into a contract with the customer to provide certain quantities over a fixed period of time. These quantities are consumed by release orders.
Case # 2: In order to get a better price.
8. A _Release_ order is created to release quantity from a quantity contract or value contract
Scenario 1 : Samsung has 1,000 computers in their New Jersey office and are constantly facing issues related to software and aging hardware. ABC Computers Inc., suggests that they enter into a contract whereby they will take care of the computers/software for a fixed yearly fee.
Question 9. What kind of contracts would they enter into ?
Service Contract
Scenario 2 :Samsung likes ABC Computer’s performance and after 1 year wishes to buy 300 more computers from them. However, since the company wishes to purchase so many computers, they wish to get a discount.
Question 10. What kind of contract would they enter into ?
Quantity Contract
Scenario 3 : Release Orders for Contracts created ( For Q.9 and Q.10 above ) will have to be created with reference to the contracts. However, the sales personnel entering the contracts might not be aware of the contracts that were created. ABC Computers want to put a system in place so that anytime orders are created for Samsung, they should be reminded that open contracts exist ( if any )
Question 11. What kind of configuration would have to be done to achieve the same in SAP ?
In the Sales Doc type “Transaction Flow” Tab the field is “Outline Agreement Message” check “B” Item Level.

While creating the above release order, the price for material S-02 comes to 99,990 for 1 pc whereas in Condition record I have specified a price of $230.00 for Condition type ZU00…Plz help…Thx and regards…Shah

2. Why is the ‘Completion Rule’ of the Quantity Contract Related SAP Item Category set to ‘C’ ?
Answer: This is to make sure total qty is referenced on released orders before contract is considered complete

3. What is the Transaction code to create Contracts in SAP ?
Answer: VA41

5. Create a Release Order for a quantity of 50 , with reference to the SAP Contract created in Q.4 and specify the Release Order #
Answer: Release order: 14101

6. Create another Release Order with reference to the SAP Contract created in Q.4 and this time, fully reference the quantity and specify the Release Order #
Answer: 14102

7. Describe in your own words, why businesses use quantity contracts?
Answer: discount for high volume purchase, but may not want to receive shipment at once

8. A release order is created to release quantity from a quantity contract or value contract

Scenario 1 : Samsung has 1,000 computers in their New Jersey office and are constantly facing issues related to software and aging hardware. ABC Computers Inc., suggests that they enter into a contract whereby they will take care of the computers/software for a fixed yearly fee.

Question 9. What kind of contracts would they enter into?
Answer: Service contract

Scenario 2 :Samsung likes ABC Computer’s performance and after 1 year wishes to buy 300 more computers from them. However, since the company wishes to purchase so many computers, they wish to get a discount.

Question 10. What kind of contract would they enter into?
Answer: Quantity Contract

Scenario 3 : Release Orders for Contracts created ( For Q.9 and Q.10 above ) will have to be created with reference to the contracts. However, the sales personnel entering the contracts might not be aware of the contracts that were created. ABC Computers want to put a system in place so that anytime orders are created for Samsung, they should be reminded that open contracts exist (if any)
Question

11. What kind of configuration would have to be done to achieve the same in SAP?
Answer: When creating an order for Samsung, Required the Contract reference to be provided.
Answer: In the document type under the “Transaction Flow Tab” in the Outline
Agreement Message slot Insert “B” (Check at item level).

A.All Contracts document types require release orders. ( Give examples of document types in either case )
False.A service contract will not require a release order

B.Why is the ‘Completion Rule’ of the Quantity Contract Related SAP Item Category set to ‘C’ ?
The item category KMN has a completion rule set to C because the target qty(available qty) has to be referenced in the release orders created with reference
to the contract.When you create release orders for more than the quantity in the contract, it will not allow you to create release orders with reference
to the contract .

C.What is the Transaction code to create Contracts in SAP ?VA41
D.Create a Quantity Contract in SAP for Customer 1400 and for material M-01 with quantity 100. Specify the Contract # :40000229

E.Create a Release Order for a quantity of 50 , with reference to the SAP Contract created in Q.4 and specify the Release Order # 14088
F.Create another Release Order with reference to the SAP Contract created in Q.4 and this time, fully reference the quantity and specify the Release Order #14089

G.Describe in your own words, why businesses use quantity contracts ?
Business use qty contracts so they are assured continuity and get a discounted price.

H.A Release order is created to release quantity from a quantity contract or value contract

Scenario 1 : Samsung has 1,000 computers in their New Jersey office and are constantly facing issues related to software and aging hardware. ABC Computers Inc., suggests that they enter into a contract whereby they will take care of the computers/software for a fixed yearly fee.

Question 9. What kind of contracts would they enter into ?Service contract

Scenario 2 :Samsung likes ABC Computer’s performance and after 1 year wishes to buy 300 more computers from them. However, since the company wishes to purchase so many computers, they wish to get a discount.

Question 10. What kind of contract would they enter into ?Quantity contract

Scenario 3 : Release Orders for Contracts created ( For Q.9 and Q.10 above ) will have to be created with reference to the contracts. However, the sales personnel entering the contracts might not be aware of the contracts that were created. ABC Computers want to put a system in place so that anytime orders are created for Samsung, they should be reminded that open contracts exist ( if any )

Question 11. What kind of configuration would have to be done to achieve the same in SAP ?
This conifguration is done on the sales doc type config.The field Qoutation messages has to be set to “B” .
So,when an item is entered by the sales personnel on the order , it checks if that item is available on any other open contracts and gives a message.

Solution: False, Service Contract document does not require a release order

Question 2. Why is the ‘Completion Rule’ of the Quantity Contract Related SAP Item Category set to ‘C’ ?

Solution: Completion Rule, talks about when the document containing this item type can be considered completely referenced. For Quantity contract, Item category will be KMN and the completion rule for it is ‘C’. Meaning QC document containing KMN Item category will only be considered completely referenced once the target quantity is completely referenced.

Question 3. What is the Transaction code to create Contracts in SAP ?

Solution: VA41

Question 4. Create a Quantity Contract in SAP for Customer 1400 and for material M-01 with quantity 100. Specify the Contract #

Solution: QC 40000237 has been created

Question 5. Create a Release Order for a quantity of 50 , with reference to the SAP Contract created in Q.4 and specify the Release Order #

Solution: Release Order 15047 has been created

Question 6. Create another Release Order with reference to the SAP Contract created in Q.4 and this time, fully reference the quantity and specify the Release Order #

Solution: Scenario 1: A company called EMU Organics sells EMU eggs to its customers with regular price. If a restaurant YUMMY Foods approaches EMU Organics asking for 1 Lakh Eggs a year, but limiting 2000 Eggs a week. Now EMU Organics creates a QC with YUMMY Foods for 1Lakh EMU eggs and creates a release order for 2000 Eggs a week.

Question 8. A _____________ order is created to release quantity from a quantity contract or value contract

Solution: Release Order

Scenario 1 : Samsung has 1,000 computers in their New Jersey office and are constantly facing issues related to software and aging hardware. ABC Computers Inc., suggests that they enter into a contract whereby they will take care of the computers/software for a fixed yearly fee.

Question 9. What kind of contracts would they enter into ?

Solution: Service Contract

Scenario 2 :Samsung likes ABC Computer’s performance and after 1 year wishes to buy 300 more computers from them. However, since the company wishes to purchase so many computers, they wish to get a discount.

Question 10. What kind of contract would they enter into ?

Solution: Quantity Contrat

Scenario 3 : Release Orders for Contracts created ( For Q.9 and Q.10 above ) will have to be created with reference to the contracts. However, the sales personnel entering the contracts might not be aware of the contracts that were created. ABC Computers want to put a system in place so that anytime orders are created for Samsung, they should be reminded that open contracts exist ( if any )

Question 11. What kind of configuration would have to be done to achieve the same in SAP ?

Solution: Configuration has to be done at the document type level using VOV8. At the Transaction flow Choose ‘A’ for Outline Agreement Messages. By choosing ‘A’, system checks if there are any Open Contracts for customer.

FALSE – This is false Service and rental do not contain material goods that require delivery, and hence no release orders. Rather they services are related to a billing plan that will be used to generate periodic billing.

Why is the ‘Completion Rule’ of the Quantity Contract Related SAP Item Category set to ‘C’ ?

This value determines when a detail line for a specific material in a quantity contract is flagged as completed. Option “C” states that the line is completed when the “target quantity” (the contract quantity for that line) has been fully referenced because orders have been released that reference that contract and material.

What is the Transaction code to create Contracts in SAP ?

T/Code = VA41

Create a Quantity Contract in SAP for Customer 1400 and for material M-01 with quantity 100. Specify the Contract #

Create a Release Order for a quantity of 50 , with reference to the SAP Contract created in Q.4 and specify the Release Order # Order 25019 – ref to contract – quantity 1

Create another Release Order with reference to the SAP Contract created in Q.4 and this time, fully reference the quantity and specify the Release Order #

Describe in your own words, why businesses use quantity contracts?

This allows the company to plan production and cash flow. It also is a way to lock in business that may otherwise fall to the competition at order time if the contract was not in place. A release order is created to release quantity from a quantity contract or value contract

Scenario 1 : Samsung has 1,000 computers in their New Jersey office and are constantly facing issues related to software and aging hardware. ABC Computers Inc., suggests that they enter into a contract whereby they will take care of the computers/software for a fixed yearly fee.

Question 9. What kind of contracts would they enter into ?

This would be a service/maintenance contract (sales doc type “SC”).

Scenario 2 :Samsung likes ABC Computer’s performance and after 1 year wishes to buy 300 more computers from them. However, since the company wishes to purchase so many computers, they wish to get a discount.

Question 10. What kind of contract would they enter into?

We can create a quantity contract for the 300 pieces. When creating the contract you can manipulate the pricing conditions. In a test I changed the ZRV1 discount from net from a positive value to a negative, thus reducing the price. You can also add or remove condition types from the contract pricing.

Scenario 3 : Release Orders for Contracts created ( For Q.9 and Q.10 above ) will have to be created with reference to the contracts. However, the sales personnel entering the contracts might not be aware of the contracts that were created. ABC Computers want to put a system in place so that anytime orders are created for Samsung, they should be reminded that open contracts exist ( if any )

Question 11. What kind of configuration would have to be done to achieve the same in SAP ?

Using VOV8 to maintain the sales order document type (i.e. ZOR) you can select on the outline agreement message options that will warn or prompt the user that contract exists and depending on the option and the number of open contracts present lists for selection. The depending on the options these can occur at either the header or line levels.

FALSE – Service contracts and schedule agreements do not need release orders.

Why is the ‘Completion Rule’ of the Quantity Contract Related SAP Item Category set to ‘C’ ?

The item category linked to QC and NORM is KMN. Completion rule C stands for
‘item target qty is full referenced’ which implies that the Quantity target set by Qty Contract needs to be full referenced for the contract to be fulfilled.

What is the Transaction code to create Contracts in SAP ?
VA41

Create a Quantity Contract in SAP for Customer 1400 and for material M-01 with quantity 100. Specify the Contract #

40000273

Create a Release Order for a quantity of 50 , with reference to the SAP Contract created in Q.4 and specify the Release Order # 25653

Create another Release Order with reference to the SAP Contract created in Q.4 and this time, fully reference the quantity and specify the Release Order #

25654

Describe in your own words, why businesses use quantity contracts ?

Convenience and pricing. Businesses with knowledge of their forecast and production requirements often enter into Qty contracts so that they negotiate better pricing based on volume as well as they do not have to repeat their POs. time to time. On top of that they will have an assured supply of goods.

A _RELEASE_ order is created to release quantity from a quantity contract or value contract

Scenario 1 : Samsung has 1,000 computers in their New Jersey office and are constantly facing issues related to software and aging hardware. ABC Computers Inc., suggests that they enter into a contract whereby they will take care of the computers/software for a fixed yearly fee.

Question 9. What kind of contracts would they enter into ?

Service contract for a period of 1 year.

Scenario 2 :Samsung likes ABC Computer’s performance and after 1 year wishes to buy 300 more computers from them. However, since the company wishes to purchase so many computers, they wish to get a discount.

A quantoty contract for 300 with discount.

Question 10. What kind of contract would they enter into ?

Scenario 3 : Release Orders for Contracts created ( For Q.9 and Q.10 above ) will have to be created with reference to the contracts. However, the sales personnel entering the contracts might not be aware of the contracts that were created. ABC Computers want to put a system in place so that anytime orders are created for Samsung, they should be reminded that open contracts exist ( if any )

Question 11. What kind of configuration would have to be done to achieve the same in SAP ?

Use the appropriate setting in the variable ‘outline agreement message’ in the configuration of the release order doc type.

Hi Siva,
Questions :
1. All Contracts document types require release orders. ( Give examples of document types in either case )
1. TRUE
2. FALSE
Answer: False – Service and rental contracts are not moving any physical material goods so no release order or delivery require, Contracts services are related to a billing plan that will be used to generate periodic billing.
2. Why is the ‘Completion Rule’ of the Quantity Contract Related SAP Item Category set to ‘C’?
Answer:. In Quantity contract, Item category will be KMN and the completion rule for it is ‘C’. Meaning QC document containing KMN Item category will only be considered completely referenced once the target quantity is completely referenced. “Completion Rule” – means when the document containing this item type can be considered completely referenced
3. What is the Transaction code to create Contracts in SAP ?
Answer: VA41
4. Create a Quantity Contract in SAP for Customer 1400 and for material M-01 with quantity 100. Specify the Contract #
Answer: 40000223
5. Create a Release Order for a quantity of 50 , with reference to the SAP Contract created in Q.4 and specify the Release Order #
Answer: Order # 13448
6. Create another Release Order with reference to the SAP Contract created in Q.4 and this time, fully reference the quantity and specify the Release Order #
Answer: 13449
7. Describe in your own words, why businesses use quantity contracts?
Answer: Business (buyer) wants discount price for high volume quantity purchase and do not want shipment at once so this allows the company to plan production and cash flow. Same time seller want to bond buyer that may otherwise fall to the competition at order time if the contract was not in place also guaranty for volume quantity purchase so they plan production accordingly. .
8. A _____________ order is created to release quantity from a quantity contract or value contract
Answer: Release Order is created to release quantity from quantity contract or value contract, reference to particular contract no.
Scenario 1: Samsung has 1,000 computers in their New Jersey office and are constantly facing issues related to software and aging hardware. ABC Computers Inc., suggests that they enter into a contract whereby they will take care of the computers/software for a fixed yearly fee.
Question 9. What kind of contracts would they enter into?
Answer: Service or maintenance contract
Scenario 2: Samsung likes ABC Computer’s performance and after 1 year wishes to buy 300 more computers from them. However, since the company wishes to purchase so many computers, they wish to get a discount.
Question 10. What kind of contract would they enter into?
Answer: Quantity Contract.
Scenario 3 : Release Orders for Contracts created ( For Q.9 and Q.10 above ) will have to be created with reference to the contracts. However, the sales personnel entering the contracts might not be aware of the contracts that were created. ABC Computers want to put a system in place so that anytime orders are created for Samsung, they should be reminded that open contracts exist ( if any )
Question 11. What kind of configuration would have to be done to achieve the same in SAP?
Answer: GO to [VOV8] – Configuration has to be done at the document type( ZOR) – under the “Transaction Flow Tab” – in the “Outline Agreement Message” Insert “B” (Check at item level) or “Insert A” (check at header level). So, when an item is entered by the sales personnel on the order, it checks if that item is available on any other open contracts and gives a message.
Thank,
Mital

A Text Widget

This is a text widget. The Text Widget allows you to add text or HTML to your sidebar. You can use a text widget to display text, links, images, HTML, or a combination of these. Edit them in the Widget section of the Customizer.